Europe IT Outsourcing: Software Benefits, Cost and More

In this article, we’ll help you explore key benefits of IT outsourcing in Europe, unpack the main reasons businesses choose this region, highlight the top players in the European IT outsourcing market, and guide you on how to kickstart your own software development outsourcing journey in Europe.

Companies have many reasons for choosing IT outsourcing in Europe. Namely, affordable offshore software development rates, many talented professionals, low taxes, a large number of companies on the market, etc. We will focus on the three most common reasons companies outsource over traditional in-house teams.

There may be plenty of top-rated developers in your country ready to build a first-class app. But what's the point if their services are unaffordable? You’ll have to make do with one solution – web or mobile – or look for more investments.

But outsourced web or mobile app development services would be the most reasonable option for most companies. For example, the European outsourcing market offers much more affordable hourly rates than the US, Australia, or Canada.

It doesn't even matter if you live in a million-person city – the competition in the IT market is pretty high, so be prepared to spend some time looking for the right candidate. Actually, the hunt for qualified software developers may last for months. Outsourcing comes to the rescue when you need to find developers in a few days.

Furthermore, outsourcing allows businesses to access a wide pool of global talent and scale operations efficiently, making IT outsourcing an integral part of global business software services market.

In case your team's already working on a high-stakes project but you'd want to take up other applications, outsourcing seems to be the best option. Another case is when there's a lack of qualified programmers to work on your main product, and you're losing money because of missing features or bugs. Time matters, and when it does, you can’t afford to spend months on staffing the team.

Generally, statistics represent all the significance and perspectives of the Europe IT outsourcing. Precedence Research represents impressive results – IT services outsourcing market is expected to hit around USD 1065.10 billion by 2030 with a CAGR of 8.06%. This growth indicates that companies increasingly recognize the advantages of outsourcing IT services and rely on them more frequently over the years.

Below, you can examine Eastern European IT outsourcing market revenue:

Let’s clarify what stimulates businesses to outsource IT service to Europe. Here are 4 key points:

Europe offers unmatched nearshore software development advantages, providing businesses with aligned time zones, cultural similarities, and geographical proximity. These factors facilitate smoother collaboration, faster feedback cycles, and enhanced project control. For companies in Western Europe and North America, Europe is a prime location for outsourcing due to its skilled workforce and cost efficiency.

For example, this approach allows businesses in Western Europe to outsource IT services to nearby countries like Estonia, Poland, or Romania while benefiting from lower costs and not sacrificing collaboration convenience and expertise quality.

One of the key reasons nearshore outsourcing in the CEE region is cost-effective is the difference in living costs and wage levels. While maintaining high-quality standards, developers and IT professionals in the CEE region generally offer their services at significantly lower rates than their counterparts in Western Europe. For instance, hourly rates for software development in CEE typically range from $25–$50, whereas in Western Europe, rates often exceed $100 per hour.

Another contributing factor is the abundance of highly skilled IT talent in CEE. Countries in this region invest heavily in education, particularly in technology and engineering fields, producing a consistent pipeline of qualified professionals.

European IT firms excel in providing offshore software development services and partnering with global clients like IBM, Google, and Samsung, thanks to their adaptability and expertise in managing massive international projects. The outsourcing industry in Europe thrives on seamless communication, adherence to global standards, and a deep understanding of diverse client requirements, ensuring consistent quality delivery.

Outsourcing software development to Europe is a smart move for businesses looking to tap into top-notch talent and dependable IT services. European companies are highly proficient at handling offshore collaborations, effortlessly navigating time-zone differences with great project management and clear communication. Plus, the cultural and professional similarities make working together easy and hassle-free.

The region’s strong focus on innovation and modern infrastructure means businesses in the U.S. or Canada can count on high-quality results without the usual offshore pitfalls. European IT providers know how to handle even the most complex projects while keeping costs manageable.

Europe is considered a modern hub for specialized IT talent, offering expertise in fields like AI, machine learning, blockchain, and cloud technologies. The outsourcing landscape in this region is thriving, driven by the increasing demand for software and cutting-edge solutions. Businesses can leverage outsourcing projects to access this expertise efficiently and cost-effectively.

Europe continues to stand out as a prime software development destination, recognized for its skilled professionals and competitive pricing. The region has solidified its reputation as a reliable IT outsourcing option for complex or niche projects.

The European market plays a huge role in shaping trends in the European ITO, attracting companies like Google or Microsoft, which seek innovative solutions for their business needs.

Europe, in particular, has become a hub for outsourcing their IT services, offering a balance of high-quality output and affordability. The European region is renowned for providing custom software development services at significantly lower rates than Western companies in the United States or Western Europe. This makes the region a prime market for IT outsourcing, especially for businesses seeking an outsourcing partner that combines cost efficiency with technical expertise. The robust services sector in Europe is bolstered by professionals skilled in various IT fields, including managed services, enabling companies to delegate critical operations while focusing on core activities.

For organizations seeking global services, the strategic advantage of outsourcing to Europe lies in its ability to deliver innovative, reliable solutions at competitive prices. This combination of affordability, quality, and accessibility ensures that businesses can optimize their budgets without compromising the excellence of their IT projects.

Let’s primarily identify examples of countries to outsource software development to in Central and Eastern Europe (CEE region):

• Estonia
• Poland
• Hungary
• Ukraine
• Slovakia, etc.

Europe IT outsourcing sector is constantly growing in number, which makes it an attractive offshoring destination. According to Clutch, currently, there are 3,016 firms that specialize in software development in this region. 913 IT firms are based in Estonia, 1064 in Poland, and 112 in the Czech Republic, not to mention other countries.

Developers from Estonia, Poland, the Czech Republic, and other European countries are well-educated and have good English and advanced programming skills. For instance, in the 2022/2023 academic year, Estonian higher education institutions had a total of 45,000 students, with a substantial portion enrolled in technical fields such as information and communication technologies (ICT), engineering, manufacturing, and construction. The index of English proficiency in Eastern European countries is also high enough. And the demand for European developers grows in parallel with the number of qualified software developers.

These Europe IT outsourcing benefits are also accompanied by moderate market costs. On average, software development rates in such countries as Estonia, Hungary, Romania, Bulgaria, and Moldova vary from $25 to $49 per hour. Depending on the country, the level of developer expertise, and the project complexity, the cost may be above $99/h. Still, if you choose an offshoring model or turn to junior software developers, the rate will be no more than $18/h.

As for Poland, the Czech Republic, and Slovakia, their cost of IT services is twice as high. Programmers in these countries charge $50 - $99 per hour.

Thus, we can say that average IT service rates in Eastern Europe vary from $25 to $74 per hour.

Here are the most popular outsourcing destinations in Western Europe:

• Germany
• UK
• Switzerland
• Netherlands
• France, etc.

You were not mistaken if you assumed that the average hourly rate for IT services here is relatively high. Western Europe comprises developed countries with large economies and high taxes. In turn, a high standard of living generates high prices, and IT services aren’t an exception. Finally, it results in high wages for local developers, directly contradicting clients' expectations.

The price range in Western Europe IT outsourcing is wide – from $37-50 up to $200-300 per hour of work. Prices in Germany, Netherlands, Switzerland, and the UK are at $50 - $99/hr, although in Switzerland, they may reach up to $200 - $300/hr, which is the highest hourly rate in the region.

For example, in Austria and Belgium, costs are twice as high. The most common range is $100 - $149 per hour. We can thus say that the average custom software development rates in these regions are close to $68 - $99 per working hour.

Northern European countries are rich in outsourcing companies. At the same time, they are characterized by a relatively wide range of prices. Here, everyone can find a region with an acceptable pricing policy.

The following are considered to be popular among companies that seek to hire outsourced IT experts:

• Norway
• Denmark
• Finland
• Sweden
• Iceland, etc.

Scandinavia is associated with a decent quality of life, personal freedom, and high wages. And we can use this description to characterize their IT pricing models partially. It’s a comparatively small but still expensive European outsourcing market.

The most expensive countries are Denmark and Finland. Developers there charge no less than $50 - $99/hr, and their prices often go up to $150 - $199/hr.

Norway and Sweden are more moderate when deciding how much to charge for IT services. An hour of software developers' time in these countries will cost about $50 - $99/hr. The highest rates end at $100 - $149/hr.

This way, we can call Scandinavia the most expensive region in terms of IT services pricing. The average software engineering cost is $50 - $174 per working hour. If you want to spend less money without losing software quality, examine the Baltic countries.

Sure, this area differs from Eastern European outsourcing and other regions with a lower number of IT companies.

Anyway, here are the countries that most commonly offer top-notch IT services:

• Croatia
• Greece
• Slovenia
• Serbia
• Romania, etc.

Our analysis shows that developers from Croatia, Greece, Serbia, and Slovenia are ready to work for a relatively low average hourly rate. IT services costs per hour in this region are quite different since we have included both prosperous Croatia and Slovenia, as well as Greece and Serbia, whose economic situation is hardly satisfying.

Hourly rates in Croatia start from $37 - $74/hr and reach up to $100 - $149/hr (Zagreb). Slovenia offers the same price range. As for Greece and Serbia, prices here are correspondingly lower. IT firms based in Greece charge $25 or less per working hour. The bigger rate you'll see is often no more than $49/hr. Serbia is in a similar situation, estimating the cost for IT services at $25 - $49 / hr. The average price for software development in the Balkans is about $28-$37 per hour.

By the way, the percentage of IT service pricing that is "less than $25" is bigger than that of any Central European country. This means Balkans are also an excellent choice if you're on a low budget.

Sure, IT service rates per hour play a vital role when you're choosing the right outsourcing software development company. But it doesn't mean everything. Same with choosing an offshore team of developers. That’s why experienced vendors pay attention to the following points:

• Financial attractiveness of the project
• Availability of required developers
• Communication means
• Business environment
• Taxes and benefits policies
• Correlation between quality of services and cost

Besides, keep in mind public holidays and minimum annual leave. If you're dealing with tight time-frames, checking these details is one of the first things to do.

Finally, make sure to check the working conditions and labor laws in the selected country. Sometimes, their terms make turning to software development companies in Europe more expensive than hiring local engineers. So choose wisely.

Here, you can examine the approximate software development rates in the most popular European outsourcing destinations:

Among other IT outsourcing destinations, Estonia has established itself as a top-tier destination for IT outsourcing, offering significant benefits for both nearshore and offshore projects. Its proximity to other European countries ensures smooth collaboration, with shared time zones and cultural alignment simplifying communication. Estonia also boasts a highly skilled workforce, with its IT sector contributing nearly 7% to GDP and employing close to 5% of the labor force.

Known for its advanced digital infrastructure, Estonia leads globally in areas like e-governance and digital public services. Businesses also benefit from cost-effective services without compromising on quality, making it an attractive alternative to other outsourcing hubs. With a wide pool of exceptional and niche tech talents, innovation, and competitive rates, Estonia may serve as an optimal Europe IT outsourcing option for you to consider. By the way, Cleveroad has its headquarters in the CEE region Estonia. Contact us to learn more about our cooperation approach, prices, and expertise in more detail.

Most outsourcing European companies adhere to the standard workflow. It consists of several sequential steps, namely:

It all starts when you choose a software vendor and leave a request on their website. Shortly after, a personal manager reaches out to you to discuss your project in general terms. During this initial conversation, you'll outline your goals, share your project vision, and discuss any specific requirements or challenges you want addressed.

Once the basics are clear, the manager may schedule a deeper consultation with their technical team to assess the project’s scope, technical feasibility, and timeline. This collaborative process ensures that the vendor fully understands your needs and can tailor their approach accordingly.

At this stage, you schedule a meeting with your vendor to discuss the project in detail. At Cleveroad, we hold a special Solution Design Workshop, during which our team, which consists of business analysts (BAs), a solution architect (SA), and a designer, works on your requirements. Specialists define business goals, a work scope, basic quality attributes, etc. Based on the processed information, Europe IT outsourcing experts provide you with a rough estimate, team composition, and a timeline; next, our team forms a proposal.

This phase turns all project requirements into a clear plan. All the previously defined details are fleshed out, starting from the platforms you want to cover to the integration of third-party services, etc. As a result of Discovery, you get the following documents:

• Feature Breakdown List
• Design concept
• UX map
• Quality attributes
• Impact map
• Flowcharts, etc.

You will also get a detailed estimate of the time and cost of software development.

When you have approved all the documents, they are passed to the development team. The software is created in several sprints; the project manager puts a particular module of the future application on each sprint. You can fully control the entire process and make changes if necessary. Also, each sprint is accompanied by software testing. Upon completing all the stages of development, the QA team performs the regression testing. They run tests on all platforms and all features and, if requested, perform stress testing.

When your software is completely ready, it can be launched. The Cleveroad team always helps clients at this stage. So, if it's a mobile app, we'll release it on AppStore or Google Play. In the case of a web product, the team moves it to the live server on the release day. Along with the finished product, you also get the following documents:

• Specifications
• Source code
• Design details
• Project Plan, etc.

Once the product is launched, the cooperation with the software vendor continues. You can develop and improve the project, including updating it for new OS versions and adding new features. In this way, you’ll be capable of ensuring that your software functions correctly and stays reliable over time.

Cleveroad is a specialized IT outsourcing company. Since 2011, we've assisted various businesses in acquiring cutting-edge technologies and bespoke software solutions in multiple domains, including FinTech, Healthcare, Logistics, Retail, Education, Media, and other business areas.

Here’s what benefits you’ll receive by cooperating with Cleveroad:

• Cleveroad has R&D centers in Estonia, Poland, and Ukraine. Besides, we have representative offices in the US and Norway and generally count nearly 280+ in-house software engineers
• We’ve received ISO/IEC 27001:2013 and ISO 9001:2015 certifications, stating the integrity of our software development approach within quality and security management
• Cleveroad achieved the highest level of verification – we’re premier verified on Clutch, placing us among the most trusted IT vendors
• We have a comprehensive Project Management Office (PMO) that’ll help you ensure consistency, efficiency, and alignment of projects with business goals
• At Cleveroad you can get full IT outsourcing or choose IT staff augmentation services, as we have 1500+ developers in our talent base in case you need to expand your internal team
• On-demand IT services: building software from scratch, cloud app development, IT consulting, legacy software modernization, UI/UX design, and more.
• Our team has rich experience in partnering with clients from various countries, including the U.S., UK, Norway, Sweden, Saudi Arabia, Australia, Singapore, Switzerland, etc.

Our outsourcing workflow is established at all stages, and guarantees are provided. We are ready to cooperate with you for a long time, so let’s start gaining the advantages of outsourcing IT services to our experienced software development specialists.

You’re welcome to look through our portfolio to see what projects our team has delivered before and find ideas for your business solution.